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This space is being used to build a future home for the yieldmancing spell database.
Access the Yieldmancing Dashboard here:
For a technical version of this article check out the PDF.
Yieldmancing is an independent project funded by the Alchemix Grants program
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Yieldmancing is the art of mastering yield. The term yieldmancing is a combination of “yield” and “mancing,” itself adapted from the Greek word manteia (μαντεία), meaning mastery through specialized methods. Put simply, Yieldmancing is the skillful orchestration of on-chain techniques that drive potential yield across interconnected strategies.
While yieldmancing evokes the inventiveness of a fantasy mage, it also demands the analytical precision of a seasoned investor. Each “spell” a yieldmancer casts—whether it’s staking tokens, providing liquidity, or leveraging advanced DeFi tools—can lead to reward or misfortune. Like magic turning on its caster, the same strategies that offer opportunities for significant gains may carry equally significant risks.
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At the forefront of this new craft is Alchemix, a protocol that reimagines self-repaying loans through yield generation. By depositing collateral and minting synthetic assets, users can pursue novel ways to channel profits back into repaying their own advances. Yet yieldmancers recognize that no system, no matter how well designed, can fully shield them from volatility or eliminate risk.
Curiosity, prudence, and self-reflection remain the bedrock of yieldmancing, enabling practitioners to refine their methods, respond wisely to market changes, and continually adapt their strategies within the ever-shifting landscape of decentralized finance.
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Yieldmancing is a multi-layered discipline that enables DeFi participants to begin with modest, passive strategies and evolve toward increasingly sophisticated loops of capital deployment. At its core, it is the art of maximizing opportunities through strategic layers of yield-generating techniques, empowering users to continuously refine and optimize their capital. By reinvesting gains and gradually layering new tactics—like staking, lending, or liquidity provision—yieldmancers seek to unlock compounding returns across multiple platforms.
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This process hinges on loops, where capital is continuously redeployed into fresh opportunities. Each time a yieldmancer harvests rewards, those earnings can be cycled back into further ventures, amplifying potential returns over time. Yet these same loops, if poorly managed, can magnify losses or expose the participant to unexpected market downturns.
In yieldmancing, every discrete strategy or combination of actions is regarded as a “spell”—a modular tactic that can be cast repeatedly or merged with others to create more robust yield engines. However, as any experienced yieldmancer will attest, even the most refined spell can backfire if market sentiment shifts abruptly or if a protocol suffers a security breach. While yieldmancing can deliver substantial advantages, it also demands vigilance, adaptability, and a healthy respect for risk in the ever-changing world of decentralized finance.
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Experienced yieldmancers quickly learn that human capital can be even more valuable than monetary capital. Supportive communities, seamless knowledge-sharing, and authentic partnerships often form the backbone of the most enduring achievements in decentralized finance. Yieldmancers who invest time in understanding new tools, mentoring emerging practitioners, or forging meaningful alliances will usually see their networks—and, by extension, their expertise—advance in ways no isolated tactic can match. This communal element drives much of DeFi’s resilience and innovation, underscoring that growth is as much a shared process as it is a personal one.
Yieldmancers who nurture these connections typically see the most meaningful progress, both in their portfolios and in their confidence to wield spells responsibly.
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Alchemy, in the realm of yieldmancing, is more than an external process—it’s a journey of self-transformation. Historical alchemists pursued the Great Work of turning base metals into gold, but often found their deepest rewards in self-discovery and personal evolution.
In DeFi, each new protocol you explore, every risk you manage, and every yield strategy you refine can become a catalyst for inner change. Each challenge—whether it’s learning a new protocol or adapting to market shifts—offers a chance to transmute personal limitations into deeper mastery. What begins as an ambition to grow your capital steadily transforms into a quest to sharpen your insights, expand your skill set, and cultivate resilience in the face of an ever-shifting market.
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Alchemix underpins this practice by providing a system of self-repaying loans. Depositing collateral—like stablecoins or ETH—mints synthetic tokens (alUSD or alETH). These synthetic tokens can be used in various DeFi strategies, while the collateral itself continuously generates yield over time, which automatically repays the loan. While this structure may cushion some risks (e.g., forced liquidations), it doesn’t negate the need for vigilance and risk management.
This structure offers key advantages:
As users become more comfortable with yieldmancing, they can build additional layers on top of this basic position, creating a loop where the yield from their investments generates more capital, which in turn can be reinvested. Each layer amplifies returns and diversifies risk, allowing users to scale their strategy and improve efficiency over time.
Each additional layer enriches the yieldmancer’s portfolio but comes with its own hazards. Success depends on balancing opportunistic loops with mindful risk management. A seasoned yieldmancer continually refines suboptimal methods, responds to fresh market data, and adapts to new protocols—much like the legendary alchemist who constantly tests, observes, and improves.
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Alchemix illuminates a path for yieldmancers, allowing them to weave spells efficiently. The magic relies on depositing collateral into yield-earning strategies and using the interests to automatically reduce the user’s outstanding advance. Meanwhile, minted synthetic assets can be cast into a variety of DeFi spells, here is an overview of the process:
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graph TD
A[Deposit Collateral]:::bronze
B[Collateral Generates Yield]:::navy
C[Automated Loan Repayment]:::bronze
D[Loan Decreases Over Time]:::navy
E[Borrow Synthetic Assets]:::bronze
F[Reborrow Synthetic Assets]:::navy
G[Repeat or Add More Layers]:::bronze
H[Use Synthetic Assets in DeFi]:::navy
A --> B
B --> C
C --> D
A --> E
D --> F
E --> G
F --> G
G --> H
classDef bronze fill:#F5C09A,stroke:#252736,stroke-width:2px,color:#252736;
classDef navy fill:#252736,stroke:#F5C09A,stroke-width:2px,color:#FFFFFF;
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